Question

14

Suppose you deposit $2000 in a bank account that has a doubling time of 19 years. To the nearest $100, what will your balance be after 5 years?

$2400

$2500

$7600

$27,900

Answer 1

We can display the information given as an equation:
2000 *
`r^(19)` = 4000; r = increase per annum
Now, we rearrange and solve for r:

`r^(19)` = 2
r =
`\sqrt[19]{2}` = 1.037.....
We can now work out the increase for 5 years like so:
2000 *
`r^(5)` = 2400.205..... ⇒ $2400